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First Horizon (FHN)
NYSE:FHN
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First Horizon
(NYSE:FHN)61Neutral
Positive Factors
Earnings Performance
Management expects positive net interest margin momentum to continue, which drives an increase in earnings per share estimates.
Interest Rate Environment
First Horizon's shares have outperformed as it is seen as a beneficiary of a higher-for-longer interest rate environment due to its asset-sensitive balance sheet.
Negative Factors
Loan Growth
Loan growth outlook is still soft and M&A is not a priority.
First Horizon (FHN) vs. S&P 500 (SPY)
Market Cap
$10.03B
Dividend Yield3.18%
Average Volume (3M)6.17M
Price to Earnings (P/E)14.2
Beta (1Y)1.42
Revenue Growth4.56%
EPS Growth-13.90%
CountryUS
Employees7,300
SectorFinancial
Sector Strength93
IndustryBanking
Share Statistics
EPS (TTM)1.36
Shares Outstanding521,769,800
10 Day Avg. Volume7,694,512
30 Day Avg. Volume6,169,547
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.26
Price to Cash Flow (P/CF)12.90
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$24.00Price Target Upside27.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
First Horizon Business Overview & Revenue Model
Company DescriptionFirst Horizon Corporation (FHN) is a prominent financial services company headquartered in Memphis, Tennessee. It operates primarily through its subsidiary, First Horizon Bank, offering a wide range of banking products and services. These include personal banking, business banking, wealth management, and capital markets services. The company serves a diverse customer base, including individuals, businesses, and institutions, with a strong presence in the southeastern United States.
How the Company Makes MoneyFirst Horizon Corporation generates revenue through multiple streams, primarily from its banking operations. The company earns money through interest income on loans and leases extended to customers, including personal loans, mortgages, and commercial loans. It also collects fees from various banking services, such as account maintenance, transaction processing, and wealth management advisory services. Additionally, First Horizon participates in capital markets activities, which contribute to fee-based income from underwriting, advisory, and trading services. Significant partnerships with investment firms and other financial institutions further enhance its revenue potential by expanding its service offerings and customer reach.
First Horizon Financial Statement Overview
Summary
First Horizon exhibits a mixed financial performance with declining revenues and profitability concerns marked by zero net income in 2024. However, the company maintains a strong balance sheet with reduced leverage and stable cash flows, supporting financial stability amidst operational challenges.Income Statement
The income statement shows a declining revenue trend from $3.209B in 2022 to $1.155B in 2024. Gross profit margin remains at 100% due to the nature of banking operations. The absence of EBIT and net income for 2024 significantly impacts profitability analysis, indicating potential operational challenges.45
Neutral
Balance Sheet
The balance sheet reflects a stable equity position with stockholders' equity rising from $8.253B in 2022 to $9.111B in 2024. The debt-to-equity ratio improved from 0.50 in 2022 to 0.37 in 2024, indicating reduced leverage. Equity ratio slightly increased to approximately 11.1% in 2024, suggesting a stable financial foundation.65
Positive
Cash Flow
Operating cash flow shows resilience, maintaining around $1.268B in 2024 despite revenue declines. Free cash flow remains strong at $1.268B, but growth has stagnated. The operating cash flow to net income ratio cannot be assessed due to zero net income in 2024, highlighting a potential risk in earnings sustainability.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.16B | 2.98B | 3.21B | 3.07B | 3.15B | Gross Profit |
| 1.16B | 2.98B | 3.21B | 3.07B | 3.15B | EBIT |
| -2.95B | 886.00M | 1.45B | 1.27B | 921.00M | EBITDA |
| 0.00 | 1.21B | 1.22B | 1.20B | 850.00M | Net Income Common Stockholders |
| 775.00M | 897.00M | 900.00M | 999.00M | 845.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 8.80B | 9.40B | 2.44B | 24.76B | 17.60B | Total Assets |
| 82.15B | 81.66B | 78.95B | 89.09B | 84.21B | Total Debt |
| 3.40B | 1.48B | 4.10B | 3.71B | 3.87B | Net Debt |
| 2.49B | -864.00M | 1.66B | -12.34B | -5.69B | Total Liabilities |
| 73.04B | 72.37B | 70.41B | 80.60B | 75.90B | Stockholders Equity |
| 9.11B | 9.00B | 8.25B | 8.20B | 8.01B |
| Cash Flow | Free Cash Flow | |||
| 1.27B | 1.26B | 2.28B | 688.00M | 114.00M | Operating Cash Flow |
| 1.27B | 1.30B | 2.31B | 741.00M | 172.00M | Investing Cash Flow |
| -1.06B | -2.60B | 8.31B | -4.62B | -4.97B | Financing Cash Flow |
| -404.00M | 1.49B | -10.87B | 4.02B | 5.18B |
First Horizon Technical Analysis
Negative
18.88
Price Trends
21.04
Negative
20.05
Negative
17.72
Positive
Market Momentum
-0.48
Positive
27.40
Positive
12.84
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FHN, the sentiment is Negative. The current price of 18.88 is below the 20-day moving average (MA) of 21.17, below the 50-day MA of 21.04, and above the 200-day MA of 17.72, indicating a neutral trend. The MACD of -0.48 indicates Positive momentum. The RSI at 27.40 is Positive, neither overbought nor oversold. The STOCH value of 12.84 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FHN.
First Horizon Risk Analysis
First Horizon disclosed 111 risk factors in its most recent earnings report. First Horizon reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
First Horizon Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $22.01B | 12.41 | 9.93% | 4.09% | 10.13% | -1.25% | |
71 Outperform | $71.14B | 13.08 | 11.10% | 3.53% | 7.24% | 7.51% | |
71 Outperform | $19.87B | 11.36 | 10.72% | 4.44% | 2.70% | -8.16% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
63 Neutral | $7.66B | 11.64 | 10.72% | 4.87% | -6.54% | -21.90% | |
61 Neutral | $10.03B | 14.18 | 8.70% | 3.18% | 4.56% | -13.90% | |
54 Neutral | $17.38B | 1,663.64 | -0.99% | 5.21% | -11.11% | -133.79% |
* Financial Sector Average
Performance Comparison
FHN
First Horizon
18.88
4.63
32.49%
CMA
Comerica
58.30
8.57
17.23%
HBAN
Huntington Bancshares
15.14
2.26
17.55%
KEY
KeyCorp
15.73
1.53
10.77%
PNC
PNC Financial
179.77
32.37
21.96%
RF
Regions Financial
22.07
3.33
17.77%
First Horizon Earnings Call Summary
Earnings Call Date: Jan 16, 2025 | % Change Since: -11.73% | Next Earnings Date: Apr 22, 2025
Earnings Call Sentiment Neutral
The call highlighted strong EPS and margin growth, capital returns to shareholders, and a successful securities portfolio restructuring, with ongoing challenges in fee income and non-performing loans. The sentiment is cautiously optimistic with confidence in strategic positioning for 2025.Highlights
EPS and Margin Growth
EPS grew by $0.12 or 8% from the prior year, with a strong net interest margin of 3.35% despite declining interest rates.
Capital Return to Shareholders
Returned over $930 million of capital to shareholders through dividends and share repurchases.
Strong Credit Performance
Net charge-off ratio for the full year was 18 basis points, a decline of 10 basis points from the prior year.
Successful Securities Portfolio Restructuring
Restructured $1.2 billion in securities, increasing yield from 1.9% to 5.1%, expecting an incremental annual impact to net interest income of approximately $35 million.
Loan and Deposit Growth
Average loans grew by over 3%, and deposits by more than 2%.
Lowlights
Notable Items Impacting Results
Fourth quarter pretax notable items reduced results by $0.13 per share, mainly due to a $91 million pretax loss from securities restructuring.
Non-Performing Loans Increase
Non-performing loans increased by 4 basis points from the third quarter, driven by the impact of higher interest rates and slower multifamily lease-ups.
Fee Income Decline
Fee income, excluding deferred compensation, decreased by $5 million from the prior quarter.
Challenges in Commercial Real Estate
Commercial real estate balances declined modestly due to client refinancing in the permanent market.
Company Guidance
During the First Horizon Bank Q4 2024 earnings call, the executives provided comprehensive guidance for 2025, emphasizing their resilience and strategic focus amid various economic conditions. The bank aims for revenue growth between flat to 4%, leveraging its countercyclical businesses as a hedge against potential interest rate declines. They reported an adjusted EPS growth of 8% for 2024, with a net interest margin maintained at 3.35% despite declining rates. The bank's capital return to shareholders in 2024 included $930 million through dividends and share repurchases. Looking ahead, they project adjusted expense increases of 2% to 4%, aligned with ongoing technology investments and operational efficiencies. Moreover, First Horizon targets a long-term return on tangible common equity of 15%, bolstered by disciplined credit management and proactive capital deployment strategies, aiming to sustain their robust CET1 ratio within a 10.5% to 11% range.First Horizon Corporate Events
Executive/Board Changes
First Horizon Director Rosa Sugrañes Announces Retirement
Neutral
Feb 14, 2025
Rosa Sugrañes has announced her retirement from the Board of First Horizon, effective at the 2025 annual meeting of shareholders. Ms. Sugrañes has been a Director since the 2020 merger with IBERIABANK Corporation and has served in various directorial roles since 2006. Her retirement does not stem from any disagreements with the company’s management.
Executive/Board ChangesBusiness Operations and Strategy
First Horizon Announces Board Restructuring and Bylaws Amendment
Neutral
Jan 30, 2025
On January 27, 2025, First Horizon Corporation’s Board elected Jeffrey J. Brown as a new director, effective immediately. Mr. Brown, with extensive leadership experience in the financial sector, is expected to bring valuable insights to the company, having served in prominent roles at Ally Financial Inc. and Bank of America. His election is part of a broader board restructuring, including the retirement of Harry V. Barton, Jr., and an amendment to the Bylaws increasing the board’s size temporarily to fourteen members. These changes reflect First Horizon’s strategic efforts to strengthen its leadership and governance as it prepares for its 2025 annual meeting.
Financial Disclosures
First Horizon Reports Mixed 2024 Financial Results
Neutral
Jan 16, 2025
First Horizon Corporation reported its full-year 2024 financial results, showing net income available to common shareholders of $738 million, down from $865 million in 2023. The decline was influenced by notable items including a net $105 million after-tax reduction. However, adjusted net income increased by 5% to $843 million due to strong credit performance and fee income generation. The fourth quarter of 2024 saw net income of $158 million, with adjusted figures at $228 million, marking a 2% increase from the previous quarter. The company experienced a modest decline in net interest margin but benefited from strong client relationships and a robust business mix, positioning it well for continued growth in 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.